Government cuts VAT on electricity bills: Fuel poverty charity says ‘it’s the start we wanted to see’
- 21 July 2026
As one of his first decisions in office, new Prime Minister Andy Burnham has announced that VAT will be removed from domestic electricity bills from 1 October 2026.
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Contact: Anna Cook, Head of Communications and Campaigns, anna.cook@nea.org.yuk. Mobile: 07884371913
Government cuts VAT on electricity bills: Fuel poverty charity says ‘it’s the start we wanted to see’
As one of his first decisions in office, new Prime Minister Andy Burnham has announced that VAT will be removed from domestic electricity bills from 1 October 2026.
The government says this will save a typical household £45 a year based on Ofgem’s price cap.
National Energy Action Chief Executive Adam Scorer says, ‘Cutting VAT on electricity bills is the start we wanted to see from the Burnham premiership. It is the ‘simplest’ decision available to government, and sets out the stall on bringing down energy costs ahead of winter.
‘Heat and power are essential services that should be exempt from VAT. Of course, this decision is on electricity alone. It will help everyone, but be less useful for the huge majority of low-income households who heat their homes with gas and cannot afford the upfront cost of shifting to solar, batteries and heat pumps. It is not a trivial distinction.
We hope this is the first of a series of policy decisions on energy debt, levies, social tariffs and supporting fuel poor households towards cheaper, low-carbon heating systems. If so, we may see an approach to energy policy that tackles both the immediate pressure on household energy bills and a progressive shift to a low-carbon future.’
ENDS
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